WASHINGTON, Jan 31 (Reuters) - U.S. labor costs increased less than expected in the fourth quarter as wage growth slowed, offering a boost to the Federal Reserve in its fight against inflation.
The Employment Cost Index, the broadest measure of labor costs, rose 1.0% last quarter after increasing 1.2% in the July-September period, the Labor Department said on Tuesday.
Economists polled by Reuters had forecast the ECI rising 1.1%. Labor costs increased 5.1% on a year-on-year basis after advancing 5.0% in the third quarter. With the fourth-quarter release, the government introduced new employment weights based on the 2018 Standard Occupational Classification system.
The ECI is widely viewed by policymakers and economists as one of the better measures of labor market slack and a predictor of core inflation, because it adjusts for composition and job-quality changes. The report was published as Fed officials were due to begin a two-day policy meeting.
